CENVAT credit cannot be denied for clerical invoice discrepancies when duty-paid supply and valid authentication are established.

Duty-paid supply of imported superior kerosene supported by Bills of Entry was sufficient to defeat the dealer's demand for alleged excess CVD collection, although penalty for improper maintenance of the register was sustained because accounting irregularities remained established. CENVAT credit taken by the recipient on invoices issued by the registered dealer could not be denied where the invoice books were validly authenticated and the supply was accepted as duty paid; clerical mismatches in invoice particulars or quantity references were not enough to disallow credit on these facts. The operative principle is that substantive duty payment prevails over minor documentary discrepancies, while separate register lapses may still attract penalty.

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Issues: (i) whether the demand raised on the dealer for alleged excess collection of CVD and the connected penalty were sustainable when the dealer produced the Bills of Entry and the record indicated duty-paid supply of superior kerosene; (ii) whether CENVAT credit taken by the recipient on invoices issued by the registered dealer was liable to be denied on the grounds that the invoices were not properly pre-authenticated and that the quantity covered by the invoices exceeded the quantity shown in some Bills of Entry.

Issue (i): Whether the demand raised on the dealer for alleged excess collection of CVD and the connected penalty were sustainable when the dealer produced the Bills of Entry and the record indicated duty-paid supply of superior kerosene.

Analysis: The dealer could not initially explain the entire trail of duty payment to the departmental satisfaction, and the records showed irregularities in the accounting of receipts and issues. However, the dealer furnished particulars of the Bills of Entry under which the imported goods had been procured, and the Tribunal accepted the explanation that the discrepancies arose from closure of business and resulting mistakes rather than mala fides. On that basis, the goods supplied to the recipient were treated as duty paid. The register irregularity, though, remained established on the record.

Conclusion: The demand was not sustainable and was set aside, but the penalty for improper maintenance of the register was upheld.

Issue (ii): Whether CENVAT credit taken by the recipient on invoices issued by the registered dealer was liable to be denied on the grounds that the invoices were not properly pre-authenticated and that the quantity covered by the invoices exceeded the quantity shown in some Bills of Entry.

Analysis: The invoices were found to have been authenticated in the manner required by the applicable notification, and there was no requirement that every page of the invoice book bear the Superintendent's signature. The recipient produced the registers and the endorsement showed valid authentication of the invoice books. As the underlying supply was accepted as duty paid, denial of credit merely because of mismatches in invoice references or quantity entries was not justified on the facts of the case.

Conclusion: The denial of CENVAT credit was unsustainable and the credit demand was set aside.

Final Conclusion: The dealer escaped the duty demand but not the penalty for register irregularity, and the recipient's credit demand was also deleted, leaving the overall relief substantially in favour of the assessee side.

Ratio Decidendi: Where the underlying goods are shown to be duty paid and the invoice book is validly authenticated, CENVAT credit cannot be denied solely on account of clerical discrepancies in invoice particulars or quantity references; separate register irregularities may still attract penalty.

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